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Ear to the Ground

Health Insurers Prefer ‘Profits Over People’

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Posted on Aug 2, 2011
Flickr / bradleypjohnson (CC-BY)

UnitedHealth Group, Aetna and WellPoint were named among the top health insurance companies in 2011 by Fortune magazine.

Major health insurance providers Aetna, WellPoint and UnitedHealth reported huge earnings this quarter, up significantly from the same quarter last year, all while the number of people actually receiving coverage for care is steadily decreasing.

Wendell Potter, a former CIGNA executive and industry insider, said in his column for the Center for Public Integrity’s iWatch News that those reported earnings, which have been steadily increasing for several quarters in a row even as the U.S. is scrambling to recover from a down economy, prove that insurance executives really value “profits over people.”

The greedy tendencies of mammoth corporations (and insurance moguls in particular) doesn’t necessarily come as much of a surprise, but the fact that much of those profits come from denying coverage to policyholders is more than a little disheartening, to say the least. —BF

Wendell Potter for iWatchNews:

This has made Wall Street very happy indeed, as reflected in the breathtaking increase in the companies’ share prices over the past year. Since the end of July 2010, investors have bid up the stock by more than 50 percent at four of the big five. WellPoint, the laggard, saw its stock price increase by a still-impressive 35 percent.

One of the secrets to achieving these results is what the insurers euphemistically call “medical management.” That often translates into denied claims and denied coverage for doctor-ordered care. The fewer claims you pay and the more procedures you refuse to pay for, the more money is left over for investors to put in their pockets.

Another important way they’ve been able to sustain such a string of impressive earnings results is to shift more and more of the cost of care to their policyholders. An increasing percentage of these companies’ policyholders are enrolled in plans that require greater cost sharing. Those policyholders pay more for care out of their own pockets than ever before while their insurers are paying much less.

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mackTN's avatar

By mackTN, August 3, 2011 at 10:11 am Link to this comment

DaveZx3

While I agree that local groups should form more initiatives to change a system
that works against them (Madison, WI, is a wonderful modern template), there is
still an argument to be waged at the federal level where decisions and actions
impact all.

Some of the best community organizing occurred during the civil rights
movement that pushed for integrated schools, desegregation, etc.  The
Montgomery Bus Boycott starved the local transportation system of funds from
African Americans until it changed its policies—it took time. 

Of course, many of our leaders, white and black, were harassed and
assassinated.  Whistleblowers are increasingly suppressed. And community
groups do need leaders who are willing to stand up to the corporate Pinkertons
that are unleashed during every uprising.

People are organizing and mobilizing; perhaps you just aren’t in the loop.

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Leefeller's avatar

By Leefeller, August 3, 2011 at 8:31 am Link to this comment

Dave, your ideas emulate and idea of Disaster Capitalization. Using the bureaucracy word, do you feel the same way about Medicare or Social Security? 

I believe a government is supposed to provide for the common good, not just the select few, well that would be my idea of a Democratic Republic.

Your comment has some validity in the way reminds me of credit unions as opposed to banks? In our community our local clinics closed down for lack of funds, I live in a rural area, hell all over the country towns, cities and States are hurting, this may place a wrench in your premise?

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prisnersdilema's avatar

By prisnersdilema, August 3, 2011 at 5:58 am Link to this comment

It’s much easier to think in terms of predator and prey.

The insurance companies are Tyrannosaurus Rex, you are a herd of cattle, munching on
GMO corn, HFCS, and spicing it up with a few poisonous meds, that you think are ok
because they are approved by Big Pharma, I mean the FDA.

Each time T Rex jumps into the herd, and scoops up some food for itself, to screams
and blood spraying over your herd mates, our government encourages you to ignore it
and return to your cud chewing. Then government officials quickly run onto the field,
when T Rex’s back is turned, to pick up some table scraps for themselves.

The are the Predators you are the prey.  Like all prey, you must constantly be watchful
and nervous, because you never know, you might be next.

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By DaveZx3, August 3, 2011 at 4:46 am Link to this comment

It is so deceitful to constantly complain about a situation which is so easily remedied by logical actions on the part of individuals who are willing to organize at the community or state level.

Individual states and smaller groups have every opportunity to form mutual insurance companies and other group purchasing entities or any other cooperative type systems.  There is absolutely no law that binds individuals to purchase health coverage from companies who overcharge, other than Obamacare. 

State insurance commissioners control every aspect of insurance in every state.  Insurance commissioners have to approve rates, as filed by insurers in each state.  But insurance commissioners also have to evaluate that every insurance company it licenses to do business in the state maintains adequate reserves in the event of mass catastrophes.  Insurance is one of the most heavily regulated industries. 

Health insurance rates in particular are heavily regulated in every state, so any excess profits not going into legitimate reserves, should be addressed to the individual state insurance departments.  Before complaining, why not find out from your state insurance department why they approve such high rates, and what you can do to change that.  Maybe you have to lobby for a new insurance commissioner.  If your state officials are corrupt, whose fault is that?

I know of small towns who pay qualified residents’ costs for medical school in return for a specified commitment to serve that community’s health care needs.  These towns now enjoy very low cost healthcare for their residents. 

There are thousands of different perfectly legal ways communities can provide for healthcare for
their residents.  One only needs to look around to see that many are taking action at the community level, the ideal level to solve these types of problems.

Why some think this problem is best solved by a federal government, one-size-fits-all, bureaucratic entity seems to be part of a larger agenda of controlling citizens’ rights to find community based solutions.  It smells more like an insurance industry conspiracy than a call for freedom from large, overcharging insurers. 

In my opinion, big insurers lobby big government for the purpose of extracting big profits.  It is more advantageous to solve healthcare issues at the community level where lobbying and other abuse is much more difficult if not virtually impossible.

As groups find better solutions, those solutions will be emulated by other groups, and cost effective alternatives will flourish.

Of course, it is much easier to blame all high premiums as well as your own personal laziness on another group, such as the Tea Party.  As though the Tea Party somehow rules your state insurance commissioner. 

Assertions like that should demand an apology, but instead, they become one more meme inducing building block in the constuction of that great wall of insidious deceit, deception and division.  Congratulations on your participation in freedom, not.

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By Richard_Ralph_Roehl, August 3, 2011 at 1:13 am Link to this comment

The Amerikan corn syrup people don’t have a health CARE system. They have a rapacious, capitalist/fascist health INSURANCE ‘$ystem’... that practices DENIAL! DENIAL! DENIAL! DENIAL!

Why can’t WE THE PEOPLE have the same health care system that Congress, the alleged servants of the people, enjoy?

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By Snafu, August 2, 2011 at 6:14 pm Link to this comment
(Unregistered commenter)

Put the blame squarely on the shareholders!! They are the ones who are investing in these companies and are voting in these Board of Directors. These BOA go from company to company and yet these stockholders are clueless because they want dividends and don’t care who it kills to get it. Many people invest for their retirement but does it mean people who are paying their premiums should get crappy healthcare? American is a “I GOT MINE SOCIETY” Its all about “ME, ME, ME” until something happens to them then they want sympathy.

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Leefeller's avatar

By Leefeller, August 2, 2011 at 4:31 pm Link to this comment

Tell it to the Republicans/tea bags, so they can get their kick back!

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By gstoddard, August 2, 2011 at 2:46 pm Link to this comment

This is news?? It has been the case for years that profits are the priority for health
insurance providers. It is unfortunate that these businesses can’t find a way to
improve profits by efficiently providing a service to the public that promotes
health at a reasonable cost.

I believe there is a moral issue that is being ignored when people are denied
needed services for life threatening illnesses because it isn’t profitable. Perhaps if
the private sector refocused its creative juices, there would be no need to
eventually implement a single payer system.

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